ONE: Not doing one!
Obvious I know, but without a clear goal and a plan on how to achieve it, it’s going to be a lot harder to get where you want to be. Plus you’re more likely to be taken by surprise from some nasty costs or tax bill.
TWO: Setting a goal, but not having a clear plan on how to achieve it.
It’s one thing to set a goal, ‘I want to make $1 million profit next year’, but you need to be clear on how you’re going to do it, how many clients do you need? How many products do you need to sell? What costs do you need to cover?
THREE: Setting your budget at the beginning of the year and not looking at it again.
Budgets can take some effort to pull together, so don’t waste it. Track it monthly and make sure you get to the bottom of any gaps. If you know what the issues are you’ll be able to address them and do it before it’s able to have an impact on your biz.
FOUR: Not having a buffer.
Most budgets a set for a year, which can be a long time in business and things can change a lot in that time. It’s best to set aside a contingency to cover any unexpected changes in your circumstances or your business.
FIVE: Having the same budget each month.
For most businesses, this just isn’t realistic. If you sell swimwear chances are you’re going to be a lot busier in spring and summer. By factoring seasonality into your budget you’ll be able to plan for busy times, when you might need to hire more staff, or quite times, where you might need to make sure there’s cash set aside to help you through.